No matter how much money you have it is important to have a basic estate plan to protect your family and your assets after your death. An estate plan can be as simple as a last will and testament to extremely detailed to contain a power of attorney, a living will and even a trust.
The first and often the most important instrument to put in place is your last will and testament. A will is a legal document that outlines your wishes regarding your assets after you die. Many people make their own wills through software or forms they download off of the internet but this isn’t always a wise choice. Requirements for wills are different from state to state and are not always easy to interpret. If you don’t create a will that can be validated in probate court then your estate may be disposed of as if you never even wrote a will. The bottom line is that hiring a professional to help craft your last will and testament is a smart choice and it can be done for a reasonable fee.
Your will establishes your wishes with respect to your property, but what if you become incapacitated and can’t direct others as to your wishes? This is where powers of attorney come in to play. A power of attorney authorizes someone else to act on your behalf in business and legal affairs. A durable power of attorney allows another party to act on your behalf if you become incapacitated and are not capable of making decisions on your own. A health care power of attorney is a durable power of attorney that is specific to health care situations.
A living will communicates your intentions regarding health care if you become unable to communicate them on your own. A living will is usually created in tandem with a health care power of attorney. The living will spells out your wishes and the heath care power of attorney allows somebody else to act based upon those wishes.
Trusts are another mechanism that will allow you to disperse your property while placing restrictions or requirements on the property. Trusts aren’t just for the wealthy. If you have dependent children that you with to leave money to, you can have it held in trust until they reach an age of your choosing. Trusts can also be an effective means to minimize taxes associated with your estate.
Lastly we are going to cover some of the tools that are available to help manage your tax burden upon your death. Life insurance is one of the primary methods to manage taxes at time of death. There are also a large variety of trusts that are effective as well. Estate planning for tax consequences is one of the more complicated aspects of estate planning and a professional can help you craft an appropriate plan. Now that you are familiar with some of the estate planning tools it is time to start the process. Whether you go it alone or enlist the help of a professional the first step is to create a list of all of your assets. Once you have your list of assets you will need to make a decision about what you’d like to happen to each asset upon your death. Should it go to family, your Alma matter, your favorite charity or someplace else that is near and dear to you?
Estate planning can seem like a daunting undertaking, but knowing that it is very important and taking it one step at a time will help you complete the process. Hiring professionals to help you in the process is also extremely helpful and highly encouraged.
Arranging your estate has become more complicated in the recent past. A few decades ago, a simple ‘last will and testament’ was enough for most people to insure that all their affairs were taken care of. These days, those in the upper class are flocking to living trusts, which have their own set of difficulties. In addition, everyone is affected by increased health issues and how they affect your estate planning. While it is true that people are living longer today than ever before, and on balance that’s a great thing, there is an unintended consequence; more people are also developing health conditions that leave them either physically or mentally incapacitated. This has added another dimension to the estate planning process; the growing popularity of living wills.
A living will is essentially a directive that is set up for the purpose of determining what treatments you may or may not want and what surgeries to have if there comes a day when you are unable to make these choices on your own. In some states, this document is also referred to as a healthcare power of attorney with medical directive. You can set it up on your own, but this is one of those legal documents that you may be better off using the services of an estate planning attorney for. Here’s why.
Think about all the possible medical conditions that can occur that may leave you without the ability to decide on the kind of care you should have. You may have thought of 5 or 10 off the top of your head. But there are at least 10 times that many (or more) that could occur. For this reason, it helps greatly to have a professional who is experienced in this area to sit down and go through everything with you. Your estate planning lawyer will be familiar with all the possible scenarios that you would not have come up with on your own. He will also be able to explain it all in layman’s terms so you can understand them clearly and decide what is best for you. For example, there may be certain situations where you prefer not to have a major surgery, and would rather have a pain killer instead. There may also come a time when you are clinically dead but being kept alive on a respirator.
These days, many people do not want to remain in a vegetative state. But, if there is no written directive, your family members will likely be the ones to decide. And if there is a dispute among them then it will likely be fought out in court, potentially causing a lot of bad blood among family members. With this one document known as a living will, you can put an end to all the speculation about what you ‘would have wanted’, because it will all be there in writing. This makes the living will a truly essential estate planning document for the modern age.
Why, What and When You Need Estate Planning
Sitting down with a financial advisor to plan the transfer of all of your personal assets upon the event of your death to your chosen beneficiaries is called estate planning. Successfully planning your estate with a professional ensures that your assets are transferred to your chosen beneficiaries as quickly and with as minimal tax consequence to them as is legally possible.
The modern process of estate planning begins with you making an inventory of all of your assets and creating a will. Often a trust is established to help minimize the tax burden that may be left along with your assets to your heirs. You want to leave your loved ones with wonderful memories and family heirlooms and treasures to cherish, not a huge financial burden to bear. A will alone is often no longer enough. You need a professional Financial Advisor to help guide you through current tax and inheritance laws and help you choose how to best plan your estate to make the transition as smooth as possible for your loved ones during what will surely be an already emotional time for them. Proper estate planning helps you to know that those prize possessions that you want to stay in your family and be passed down through following generations will do just that. You’ll no longer have to worry that a heartbroken heir might be forced to sell those prized possessions just to satisfy Uncle Sam’s tax bill.
You may be asking yourself, isn’t estate planning just for the really wealthy folks? The process of inventorying and totaling the value of your assets can be a real eye opening experience. It’s best to go through this process with a professional advisor so you can be advised how current federal and state laws may affect your estate upon your death. After you, add up the value of your home, personal property, investments, life insurance benefits and retirement accounts you may be surprised to find that your estate reaches into in the taxable category. Even, if you learn that your estate is not likely to be subject to federal estate taxes, estate planning is a wise choice to be assured that your wishes are carried out just the way you want them after you are gone and that your wishes are carried out in a professional manner for all those involved.
Important Considerations for Estate Planning and Creating a Will
When nearing the end of life, few people wish to have the burden of deciding where to allocate their money and property. Similarly, when someone is grieving the loss of a loved one, the last thing they might wish to think about is trying to distribute money and property if the person did not have a living will.
For these reasons, it is important to create a few essential legal documents through the process of estate planning. These documents will help ease the burden on your family, as this ensures that your final wishes are carried out should you become terminally ill or unable to care and make decisions for yourself. Here are a few considerations to keep in mind when it comes to estate planning.
Guardianship
If you have children who are minors, always choose a guardian for them. If not, the judge in court will decide who becomes the legal guardian to the children in the event of your death. Naming the guardian of your children is something you write into your legal documentation, and it is much better than allowing a court to decide this outcome.
Property Inheritance
It is important to document who will inherit your property. In many cases, people choose to sign over their property to their children or to the family or friends closest to them. Most people think that it must be a person, but you are certainly allowed to sign your property over to an organization or institution in some cases.
Living Trusts
Another option to consider is a living trust. A trust is when a trustee receives legal control over a person’s property or money. The beneficiary is the person who receives the arrangement of the trust, which could be property or money. Similar to what is outlined in a will, a trust can be received by a company, organization, or business in some cases, rather than a person.
Legal Agents
If you don’t wish to determine where your money goes, you are allowed to choose a power of attorney. This is the person who could carry out your legal affairs for you if you do not wish to decide for yourself. In addition, naming the executor of your will is vital, because the executor is the person who would carry out the directions as stated in the document.
There are many things to consider when drafting wills and testaments and other legal documents. You should consult with an attorney who specializes in estate planning to ensure that you’re on the right track with all of your legal agreements. People often think that the court or the judge can handle everything for them, but without a living will, the family members of the deceased would have to make certain legal decisions instead. Having express instructions outlined on paper can ultimately help to ease the family’s burden during this time.
Don’t Have A Valid Will? Contact Estate Planning Lawyers Today!
We all have a rendezvous with Death, but few of us like to think about it. That may be why almost half of Utah adults do not have a last will and testament. Estate planning is one of the most awkward and uncomfortable areas of law and that’s really saying something! Because it’s distressing and disagreeable, most folks put it off until the very last minute — while others don’t get to it at all. This is always a mistake.
No Will, No Way
When a person passes away without a will (intestate), the distribution of assets must be settled in probate court. As a general rule, spouses and blood relatives will receive the lion’s share of the estate, while friends and loved ones are not entitled to anything under state law. To ensure that your assets are allocated according to your wishes, you must contact estate planning lawyers.
What Do They Do?
First and most importantly, they draw up legally-binding wills that cannot be disputed or contested in court. Most people do not realize how important this simple document is to those they leave behind. Even tight-knit families can encounter unforeseen disputes when the estate of a loved one must be divided. Add grief, resentment, and anger to the mix, and you have a recipe for disaster. It’s no surprise that fighting over inheritance is a story as old as the pyramids.
Who Needs Them?
You might be young and as fit as a fiddle, but according to the experts, anyone who has substantial assets should have a last will and testament. Yes, the process is mostly about assets, but is also involves medical directives in the event that you should become incapacitated. It may be unlikely, but the tragic truth is that people of all ages sustain catastrophic injuries every day in Utah. And without specific medical directives in place, your family may be unable to determine exactly what you want done in any given circumstance. For example, they may not know whether you would want to be left on a life-support system for a prolonged period of time. This ambiguity can and has led to protracted legal battles in the past.
At the end of the day, life is unpredictable. Most of think we have all the time in the world, but that is seldom the case. Estate planning and administration may initially seem morbid and uncomfortable, but it is also thoughtful and considerate. After all, the worst thing we could ever do to our loved ones is to leave them with an imbroglio if we should pass before our time.
Legal Assistance
Individuals who are considering drafting a trust or a will may wish to consult with an estate planning lawyer. He or she can explain the advantages of using a trust as well as a will. He or she can make recommendations based on the specific considerations of the client. He or she may even recommend using both documents, such as by using a pour-over will that places any property owned at the time of the testator’s death into the trust.
Legal Assistance
Individuals who are considering drafting a trust or a will may wish to consult with an estate planning lawyer. He or she can explain the advantages of using a trust as well as a will. He or she can make recommendations based on the specific considerations of the client. He or she may even recommend using both documents, such as by using a pour-over will that places any property owned at the time of the testator’s death into the trust.
